Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

<p><strong>Yesterday analyst meeting came out with a positive tone. We expect strong recovery in 2H21, as Europe’s acceleration of fully-vaccination rate with relaxation of mobility restrictions.</strong></p><div>• Despite reporting the 6-consecutive quarters loss in its 2Q21 operation, its EBITDA marked another positive quarter at Bt3.1bn, compared to loss of Bt1.8bn in 2Q20 and +5 times QoQ, driven by the recovery of hotel business in Europe and food operations in China and Australia.</div><div></div><div>• Strong performance in Europe with the relaxation of mobility restrictions in region starting in mid-May 21.</div><div></div><div>• We expect 3Q21 earnings to incur another loss with QoQ growing EBITDA driven by improving hotel operations in both Europe and Americas.</div><div>
<br>
</div><p><strong>We maintain BUY rating with target price of Bt36.0, based DCF method (WACC of 7% and terminal growth of 2%), implying 59.7xPE’22 and 36.6xPE’23.</strong></p>

Yesterday analyst meeting came out with a positive tone. We expect strong recovery in 2H21, as Europe’s acceleration of fully-vaccination rate with relaxation of mobility restrictions.• Despite reporting the 6-consecutive quarters loss in its 2Q21 operation, its EBITDA marked another positive quarter at Bt3.1bn, compared to loss of Bt1.8bn in 2Q20 and +5 times QoQ, driven by the recovery of hotel business in Europe and food operations in China and Australia.• Strong performance in Europe with the relaxation of mobility restrictions in region starting in mid-May 21.• We expect 3Q21 earnings to incur another loss with QoQ growing EBITDA driven by improving hotel operations in both Europe and Americas.
 
We maintain BUY rating with target price of Bt36.0, based DCF method (WACC of 7% and terminal growth of 2%), implying 59.7xPE’22 and 36.6xPE’23.

MINT: Strong Performance in Europe Supports 2H21 EBITDA Growth

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p>As the Thai government announced that they will open the borders in 120 days, a stock that will rally hard is obviously <a href="https://www.smartkarma.com/entities/airports-of-thailand-pcl" target="_blank" data-smartkarma-citation="entities:239:1" rel="noopener">Airports of Thailand (AOT TB)</a>as it directly links with the number of foreign tourists coming to Thailand. </p>
<p>When the market fully digests the news that Thailand is fully opened for foreign tourists, <a href="https://www.smartkarma.com/entities/airports-of-thailand-pcl" target="_blank" data-smartkarma-citation="entities:239:1" rel="noopener">Airports of Thailand (AOT TB)</a> has underperformed the other tourism names that have benefited from the increasing vaccination in Thailand. </p>
<div class="content-highlight">
<p>For those who have been patient holding AOT, you shall be rewarded soon. </p>
<p>For investors who do not have AOT in the portfolio yet, this is the biggest catalyst so far thus please start building a position.</p>
<p>For investors who are short AOT, although one may think that the tourists may not come that soon, the stock will rally much earlier than the tourists coming back to Thailand as the pent-up demand is massive and vaccines are pretty much available around the world. </p>
</div>

As the Thai government announced that they will open the borders in 120 days, a stock that will rally hard is obviously Airports of Thailand (AOT TB)as it directly links with the number of foreign tourists coming to Thailand. 
When the market fully digests the news that Thailand is fully opened for foreign tourists, Airports of Thailand (AOT TB) has underperformed the other tourism names that have benefited from the increasing vaccination in Thailand. 

For those who have been patient holding AOT, you shall be rewarded soon. 
For investors who do not have AOT in the portfolio yet, this is the biggest catalyst so far thus please start building a position.
For investors who are short AOT, although one may think that the tourists may not come that soon, the stock will rally much earlier than the tourists coming back to Thailand as the pent-up demand is massive and vaccines are pretty much available around the world. 


Airport of Thailand (AOT): 120 Days to Reopening

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

Cross Asset Strategy

<p>Thailand plans to fully reopen to foreign visitors in 120 days, given it aims to give at least one dose of vaccine to the majority of residents by early October.</p>
<p>The country aims for some tourist destinations to be open to fully vaccinated visitors without any quarantine requirement before this time. Phuket is seen as the “pilot” for the new scheme.</p>
<p>Thailand's economy is highly dependent on tourism with around 12% of GDP officially from tourism but the true exposure is closer to 20% given all the related industries outside travel and hotels from retail to banks. </p>
<p>These most recent plans were unveiled in an address by Prime Minister Prayuth Chan-Ocha in a National address yesterday, which included a number of important concessions, which can be seen in the detailed section.</p>
<p>We recommend increasing weightings in Thai hotels, hospitals, selective retailers, and banks to play this tourism recovery theme. Please see below for details. </p>

Thailand plans to fully reopen to foreign visitors in 120 days, given it aims to give at least one dose of vaccine to the majority of residents by early October.
The country aims for some tourist destinations to be open to fully vaccinated visitors without any quarantine requirement before this time. Phuket is seen as the “pilot” for the new scheme.
Thailand's economy is highly dependent on tourism with around 12% of GDP officially from tourism but the true exposure is closer to 20% given all the related industries outside travel and hotels from retail to banks. 
These most recent plans were unveiled in an address by Prime Minister Prayuth Chan-Ocha in a National address yesterday, which included a number of important concessions, which can be seen in the detailed section.
We recommend increasing weightings in Thai hotels, hospitals, selective retailers, and banks to play this tourism recovery theme. Please see below for details. 

Thailand - 120 Days Later - Fully Vaccinated Tourism to Resume

<p><strong>Yesterday analyst meeting came out with a positive tone. We expect strong recovery in 2H21, given Europe vaccination progress and improvement performance of food business after easing lockdown in Thailand.</strong></p><div>• The earnings drop in 1Q21 was a result of performance in hotel business, mainly attributed from the new wave of COVID-19 pandemic in Thailand. Also, It was a low season for NH chain hotel.</div><div></div><div>• Meanwhile, a total same store sales growth of food business was -15.3%, which was an improvement for three consecutive quarters from a decline of 36.8% in 2Q20, 17.2% in 3Q20, and 15.5% in 4Q20, driven by a recovery in Australia and China hub.</div><div></div><div>• Trimmed 2021-23E forecast to factor in new wave of COVID-19.</div><div></div><div>• We expect 2Q21 earnings should still be under pressured from the impact of COVID-19 outbreak and lockdown measures. However, we expect its earnings to recover strongly in 2H21.</div><div>
<br>
</div><p><strong>We maintain BUY rating with new rolled-over 2022E target price of Bt36.0 (+13% from previous target price) based DCF method (WACC of 7% and terminal growth of 2%), implying 59.7xPE’22 and 36.6xPE’23 supported by (1) the faster-than-expected COVID-19 vaccinations in many countries across the globe (2) lockdown restrictions loosened in several European countries and (3) capital expenditure reduction.</strong></p>

Yesterday analyst meeting came out with a positive tone. We expect strong recovery in 2H21, given Europe vaccination progress and improvement performance of food business after easing lockdown in Thailand.• The earnings drop in 1Q21 was a result of performance in hotel business, mainly attributed from the new wave of COVID-19 pandemic in Thailand. Also, It was a low season for NH chain hotel.• Meanwhile, a total same store sales growth of food business was -15.3%, which was an improvement for three consecutive quarters from a decline of 36.8% in 2Q20, 17.2% in 3Q20, and 15.5% in 4Q20, driven by a recovery in Australia and China hub.• Trimmed 2021-23E forecast to factor in new wave of COVID-19.• We expect 2Q21 earnings should still be under pressured from the impact of COVID-19 outbreak and lockdown measures. However, we expect its earnings to recover strongly in 2H21.
 
We maintain BUY rating with new rolled-over 2022E target price of Bt36.0 (+13% from previous target price) based DCF method (WACC of 7% and terminal growth of 2%), implying 59.7xPE’22 and 36.6xPE’23 supported by (1) the faster-than-expected COVID-19 vaccinations in many countries across the globe (2) lockdown restrictions loosened in several European countries and (3) capital expenditure reduction.

MINT: Europe Performance Back on Growth Track in 2H21

Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Debt Capital Markets

THAI CDS USD SR 5Y D14 / Debt Capital Markets

<p>We initiate our coverage of Thailand’s Thai Baht (THB)-denominated corporate bond market. In the report, we review the country’s THB bond market with a focus on corporate bonds, excluding commercial papers, in terms of market composition, participants (issuers &amp; investors), and rating agencies. We also describe major hindering points for the development of the THB bond market and compare the THB bond market with Singapore’s SGD bond market where we see as the next milestone for the THB corporate bond market.</p>
<p>Here we see the size of THB bond market to be quite small relative to Thailand’s GDP (and bank loans). The fact that individual investors account for the majority of corporate bondholders does not mean individual investors are more interested in investing in bonds or have more access to the corporate bonds than institutional investors. Rather, we believe it is a lack of investment opportunities available to individual investors which has left investors with bonds (other than bank deposits) to invest to receive fixed income. Also, a lack of high-yield bond analysis among institutional investors, an absence of hedge funds, and regulators’ risk averse opinion on high-yield bonds all lead to limited corporate bond holding by institutional investors.  </p>
<p>Our subsequent research report(s) on the THB bond market will reflect on liquidity, valuation (including pricing &amp; benchmark), and benefits/concerns for international investors looking to diversify its bond portfolio and/or seeking to increase exposure in THB financial assets.</p>
<p>We note that a high-yield bond sector on an international scale comprises THB bonds with a rating of A+/A+(Tha)  with lower ratings on Thailand’s national scale (<em>See Rating Agencies sector</em>).  As a result, we aim to cover Thailand’s THB corporate bond market rated A+/A+(Tha) or lower on a national scale by TRIS Ratings and/or Fitch Ratings (Thailand) as well as unrated bonds issued through both public offering and private placements as long as we can obtain sufficient public material information to make recommendations. Our analysis on the rated bonds will be focused on our opinion on the existing local and international rating(s) and expected rating actions. Our analysis on unrated bonds will be, on the other hand, an attempt to suggest how the market should perceive the bonds’ implied credit ratings. In both cases, we aim to provide valuation to help investors make judgments whether they receive sufficient returns for the credit and liquidity risks they are taking on.</p>

We initiate our coverage of Thailand’s Thai Baht (THB)-denominated corporate bond market. In the report, we review the country’s THB bond market with a focus on corporate bonds, excluding commercial papers, in terms of market composition, participants (issuers &amp; investors), and rating agencies. We also describe major hindering points for the development of the THB bond market and compare the THB bond market with Singapore’s SGD bond market where we see as the next milestone for the THB corporate bond market.
Here we see the size of THB bond market to be quite small relative to Thailand’s GDP (and bank loans). The fact that individual investors account for the majority of corporate bondholders does not mean individual investors are more interested in investing in bonds or have more access to the corporate bonds than institutional investors. Rather, we believe it is a lack of investment opportunities available to individual investors which has left investors with bonds (other than bank deposits) to invest to receive fixed income. Also, a lack of high-yield bond analysis among institutional investors, an absence of hedge funds, and regulators’ risk averse opinion on high-yield bonds all lead to limited corporate bond holding by institutional investors.  
Our subsequent research report(s) on the THB bond market will reflect on liquidity, valuation (including pricing &amp; benchmark), and benefits/concerns for international investors looking to diversify its bond portfolio and/or seeking to increase exposure in THB financial assets.
We note that a high-yield bond sector on an international scale comprises THB bonds with a rating of A+/A+(Tha)  with lower ratings on Thailand’s national scale (See Rating Agencies sector).  As a result, we aim to cover Thailand’s THB corporate bond market rated A+/A+(Tha) or lower on a national scale by TRIS Ratings and/or Fitch Ratings (Thailand) as well as unrated bonds issued through both public offering and private placements as long as we can obtain sufficient public material information to make recommendations. Our analysis on the rated bonds will be focused on our opinion on the existing local and international rating(s) and expected rating actions. Our analysis on unrated bonds will be, on the other hand, an attempt to suggest how the market should perceive the bonds’ implied credit ratings. In both cases, we aim to provide valuation to help investors make judgments whether they receive sufficient returns for the credit and liquidity risks they are taking on.

Thailand

Minor International PCL is a global company focused on three primary businesses including restaurants, hotels and lifestyle brands distribution.

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Minor International (MINT TB)

MINT: Strong Performance in Europe Supports 2H21 EBITDA Growth

Yesterday analyst meeting came out with a positive tone. We expect strong recovery in 2H21, as Europe’s acceleration of fully-vaccination rate with...

Pi Securities PCL, Thailand

Airport of Thailand (AOT): 120 Days to Reopening

As the Thai govt announced that they will open the borders in 120 days, the Airports of Thailand share will rally hard as it directly links with...

Henry Soediarko

Thailand - 120 Days Later - Fully Vaccinated Tourism to Resume

Thailand plans reopen to reopen its borders to the fully vaccinated in 120 days without quarantine restrictions, which will be a boon for the...

Angus Mackintosh

MINT: Europe Performance Back on Growth Track in 2H21

Yesterday analyst meeting came out with a positive tone. We expect strong recovery in 2H21, given Europe vaccination progress and improvement...

Pi Securities PCL, Thailand

Thailand: The Baht Bond Bandwagon

We initiate our coverage of Thailand's THB corporate bond market with market composition, participants, and rating agencies.

Bondcritic

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